Upward trend in German fund investments, Spezialfonds preferred

Anna Fedorova

08 October 2012

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Despite the continuously diminishing number of investment funds on offer across Europe, German investors have brought assets under management in the country to a record high. Spezialfonds remains the favourite fund structure among the locals.

Despite the continuously diminishing number of investment funds on offer across Europe, German investors have brought assets under management in the country to a record high. Spezialfonds remains the favourite fund structure among the locals.

Ever since 2007, the number of investment funds offered by European providers has been shrinking.

According to Lipper statistics, at the onset of the crisis Europe saw two fund launches for every fund closure.

By 2011, the number of fund closures outstripped the number of launches across Europe, and the trend has continued throughout the first quarter of this year.

A similar picture can be observed in Germany, reported by the local trade body, Bundesverband Investment und Asset Management (BVI).

Compared to 2007, there are now much fewer fund launches and much more fund liquidations.

Despite this, however, investors are becoming more active. In August, they pumped a total of €4.4bn into the industry, bring the total assets under management up to nearly €2trn by the end of the month.

The most popular investment vehicle is the Spezialfonds, as has been the case for a long time. This fund type attracted €40bn of inflows in the first eight months of the year.

Thomas Richter, managing director of Germany’s trade body, says: “Provided the regulatory framework will remain stable, Spezialfonds will continue to enjoy demand, especially from the pension sector, for which they are an irreplaceable investment tool.”

The statistics once again underpin the argument against banning new real estate Spezialfonds launches in Germany.

The suggestion came from Berlin as part of integrating the Alternative Investment Fund Management Directive (AIFMD) into the local law system, but was not met with support from the local market players.

It is still unclear what the final solution proposed by Berlin with regards to the regulation of real estate funds will be.